Tuesday, March 20, 2012

Iran Buying, Stockpiling US Wheat

Iran is buying American wheat for the first time in three years as it seeks to hedge against the growing impact of sanctions and weather-related crop shortages. Some 120,000 tonnes of hard red winter wheat grown in the Plains is on its way to the Islamic Republic, according to the U.S. Department of Agriculture. The sale of another 60,000 tonnes has been finalized, according to trade sources, and Iran may ultimately buy some 400,000 tonnes of U.S. wheat this year.

The purchases are part of a massive effort by the Islamic Republic to build up its grain stockpiles amid growing difficulties in financing imports of everything from steel to palm oil. At the same time, Iranian companies are devising elaborate workarounds to ensure find new markets for crude oil exports.

Exports of U.S. wheat to Iran are legal. U.S. and European sanctions against Iran exempt agricultural products. The major U.S. commodity traders -- Bunge, Archer Daniel Midland and Cargill -- won't comment on whether they were involved in the deals, but Cargill told CNN that it "does sell agricultural commodities to Iran as food is specifically excluded from the sanctions" implemented because of Iran's nuclear program….